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Disney+ Plans Price Increase for Ad-Free Subscription Tier


Disney+ will implement a series of price hikes across its streaming service offerings to boost the platform's profitability. Starting October 12, the ad-free version of Disney+ will see a 27% increase in its monthly cost, rising to $13.99. This move is part of Disney's strategy to drive more significant revenue from streaming ventures.


While the cost of the ad-supported Disney+ tier remains steady at $7.99 per month, the company will also introduce the ad-tier option to specific markets in Europe and Canada from November 1.


In tandem with the Disney+ price changes, Hulu's subscription costs will also be adjusted. The ad-free version of Hulu will see a 20% increase, taking the monthly charge to $17.99, while the ad-supported Hulu subscription will remain at $7.99 monthly.


For context, Netflix's standard plan, which offers an ad-free experience, currently costs $15.49 monthly. Additionally, Warner Bros. Discovery's Max subscription costs $15.99 per month.


The decision to elevate the price of Disney+ to a level comparable to ad-free Netflix and Max, and to further increase Hulu's price, indicates Disney's confidence in the value of its content library's competitiveness. When Disney CEO Bob Iger launched Disney+ in 2019, the service's initial price of $6.99 per month was deliberately set lower than that of Netflix.


Last year, Disney executed a $3 per month price hike for Disney+, and surprisingly, this did not lead to a substantial loss of subscribers. Iger expressed his contentment with this outcome, indicating that the price increase did not significantly impact subscription cancellations.


Iger noted that Disney's strategy drives users toward its ad-supported services by maintaining the exact pricing for those tiers. He further emphasized that the streaming space's advertising landscape is healthier than traditional linear TV.


In the effort to attract more subscribers to its ad-supported service, Disney has achieved an impressive milestone. Since its launch in December, the ad-supported Disney+ service in the United States has gained 3.3 million subscribers. Around 40% of new Disney+ subscribers have opted for the ad-supported tier.


Amidst the looming threat of strikes by Hollywood writers and actors potentially affecting content production, Disney is taking a gamble that consumers will be willing to pay more for its streaming services.


To cater to consumers seeking Disney+ and ad-free Hulu, the company is introducing a "premium duo" offer for $19.99 per month, presenting a $12 monthly saving. This new deal will be accessible from September 6. The Disney+ and Hulu bundle with ads will remain unchanged at $9.99 per month.


Disney is also adjusting the pricing of its bundled offerings. The bundle comprising Disney+ (ad-free), Hulu (ad-free), and ESPN+ (with ads) will rise to $24.99 per month from $19.99 per month. On the other hand, the bundle with commercials will increase by $2 to $14.99 per month.


In the fiscal third quarter, Disney announced that its streaming division incurred a loss of $512 million. During this period, Disney+ (excluding India's Hotstar) gained 800,000 subscribers, bringing the number of Disney+ subscribers to 105.7 million (excluding Hotstar) and around 146 million globally.


Hulu + Live TV will also see price adjustments, with the ad-supported tier increasing to $76.99 from $69.99 per month and the ad-free version costing $89.99, up from $82.99 per month.

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